668 ANNUAL REPORTS OF DEPARTMENT OF AGRICULTURE. 



agers, but the investigation of their conduct will be carried on by the 

 State commissioner of agriculture. 



These offenses were not confined to any one class of agencies 

 in the market. As soon as their nature appeared, and as they were 

 apparent violations of the exchange rules, the auditors reported them 

 to the board of directors of the exchange. The rules of the live- 

 stock exchange at South St. Paul had been filed with us as required 

 by law, and these rules include the right of the exchange to punish 

 its members for improper conduct. The rules of the stockyards 

 company also have been filed with this department and it has au- 

 thority to deal with misconduct in the yards. Under the packers 

 and stockyards act both the exchange and the stockyards are re- 

 quired to enforce the rules and regulations which they have filed 

 with us. The exchange can discipline its members either by fines 

 or by suspension or expulsion from membership because its mem- 

 bers have agreed to abide bj^ these rules. The stockyards company 

 can exercise the same power over wrongdoers by virtue of its owner- 

 ship of the yards and can bar agencies from the yards in case of 

 flagrant wrongdoing in order to protect its market place. 



Such authority on the part of the exchange and the stocl^y^ards 

 company, however, in no way precludes or interferes with the en- 

 forcement by the Secretary of Agriculture of any disciplinary^ au- 

 thority that he may possess under the packers and stockyards act. 

 There seems to be a misunderstanding as to the authority of the 

 Department of Agriculture. The Secretary of Agriculture has no 

 authority to refuse to register commission agencies doing business 

 on the market. He has no authority directly to put off the market 

 commission agencies which may be found guiltj'^ of wrong-doing. 

 The part of the law which gives authorit}'^ for dealing with irregu- 

 lar practices provides that when such practices are found the offend- 

 ing party shall be notified and, if necessary, a full hearing shall 

 be held { and in case guilt is established, either by admission or 

 through the hearing, the Secretary has authority to issue an order 

 to cease and desist from such wrongdoing. After the order to cease 

 and desist has been issued against any commission agency it becomes 

 subject to a heavy fine for any repetition of the offense. No fine can 

 be imposed for the first offense, except through prosecution in court, 

 for such special offenses as rebating or failing to keep required 

 records. 



The task of auditing the books of more than 30 commission agencies 

 in this market was a big one. We could have waited until the audit 

 is completed and then cite these agencies to hearings, when if they 

 are found guilty we can issue orders against them to cease and desist. 

 We could not have put them off the market, nor could we have fined 

 them at that time for what they had done. Such a course would have 

 delayed results for several months. A person charged with an 

 offense which may call for an order from the Secretary of Agri- 

 culture is entitled to notice and an opportunity to be heard, in keep- 

 ing with his constitutional rights. On the other hand, it was evi- 

 dent that the members of the exchange had rendered themselves sub- 

 ject to punishment for violation of its rules, and it was evident that 

 they had violated rules of the stockyards company. To get prompt 

 action, therefore, these agencies were at once reported to the exchange. 



